Berthold v. Target is a 2017 lawsuit in the Northern District of Illinois in which the type foundry Berthold alleged that Target Corporation used Berthold’s Akzidenz-Grotesk font software beyond the terms of a desktop licence. Berthold claimed copyright infringement and breach of the licence, including its clause requiring the licensee to document and certify its use on request.[1] The parties settled and the case was dismissed with prejudice in October 2018 without a ruling on the merits.[3][4]
Background
According to the complaint, Berthold sold a traditional desktop licence permitting use of its font software for internal business purposes on a limited number of computers, and an enterprise licence that allowed fonts to be used and embedded to create and distribute printed and digital materials, including web fonts, digital publishing and apps.[1] On 2013-08-22 Target bought a desktop licence for Akzidenz-Grotesk Condensed BE (12 font software programs), which Berthold said allowed use on 10 computers for internal business purposes with limited embedding rights.[1] Target stated that it paid $750 for the licence and obtained it from MyFonts.com.[2]
The dispute
Berthold alleged that Target sent copies of two of the fonts to Calango, a design firm, to create animated versions for branding, used the resulting video at a sales meeting, and embedded another Akzidenz-Grotesk font in PDF files distributed to third parties and made available online, all without an enterprise licence.[1]
On 2017-08-04 Berthold asked Target to document its uses under the licence’s compliance term, which read: “within thirty (30) days of receipt of a written request from Berthold, you will fully document and certify that use of any and all Berthold font software in your possession at the time of the request conforms with your license(s) from Berthold.” Target replied that it had investigated and could “confirm that Target is in fact in conformance”. Berthold pleaded this as a breach and relied on the termination clause, under which the otherwise perpetual licence “will immediately and automatically terminate without notice” on failure to comply with any term.[1]
Target moved to dismiss. It argued that Berthold had not registered copyright in the licensed “BE” font software, as the Copyright Act requires before suit, and could not rely on registrations for its different “Pro” font software; that typefaces themselves are not copyrightable; and that without a federal copyright claim the court had no jurisdiction over the contract claim.[2]
Decision or outcome
The court did not rule on the motion. After the parties told the court on 2018-09-19 that they had reached an agreement, the motion to dismiss was terminated as moot.[4] On 2018-10-02 they stipulated to dismissal of all claims with prejudice, “with each party bearing its own fees and costs as agreed to by settlement”, and the court dismissed the action on 2018-10-03.[3][4] The settlement terms are not in the public record.
Significance for software licensing and SAM practice
Font software is licensed much like other software, by number of computers and by type of use, and is easily copied to agencies and embedded in documents that leave the organisation. The case shows a foundry using a contractual compliance clause, similar to an audit clause, and an automatic termination clause alongside copyright claims, and shows the registration issue a licensee can raise when the registered font files differ from the licensed ones.[1][2] A similar dispute over a business licence for font software is described in Monotype v. Deluxe.
Lessons learned
- Desktop licences are narrow. The licence Berthold described covered internal business use on a set number of computers with limited embedding; external branding and distributed PDFs required a broader licence in Berthold’s view.[1]
- Answer compliance requests with documentation. The licence required the licensee to “fully document and certify” its use within 30 days, and Berthold pleaded a short assurance of conformance as a breach.[1]
- Watch for automatic termination. The perpetual licence terminated automatically on any non-compliance, after which all copies had to be destroyed.[1]
- Know which font files are licensed. Target’s defence turned on the difference between the licensed “BE” fonts and the registered “Pro” fonts, so records of exactly which files were bought matter.[2]